Competitionfighting on customersto succeed : control the 3Cs Customerscustomers becomes a King/Queento succeed : finding and retaining customers ChangeEC is a new distribution channelto succeed : convince customers to go online and then to choose your company over the online competitorsThe major pressures are labeled the 3Cs

Purchasing decision begins with customers reaction to stimuliDecisionMakingProcess

Consumer TypesIndividual consumers: get much of the media attentionOrganizational buyers: do most of the shopping in cyberspacePurchasing TypesImpulsive buyers: purchase products quicklyPatient buyers: purchase products after making some comparisonsAnalytical buyers: do substantial research before making the decision to purchase products or services Purchasing ExperiencesUtilitarian: shopping to achieve a goal or complete a taskHedonic: shopping because it is fun and I love it

Environmental VariablesSocial variablespeople influenced by family members, friends, co-workers, whats in fashion this year, Internet communities and discussion groupsCultural variablesPsychology variablesOther environmental variablesavailable information, government regulations, legal constraints, and situational factors

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Consumer Demographics (1998)Age (mostly 21-30 year-old)Marital status (41% married & 39% single)Educational level (81% with at least some college education & 50% obtained at least baccalaureate degree)Ethnicity (87% white in America)Occupation (26% educational-related field, 22% computers & 22% other professionals) Prentice Hall, 20008

Consumer DemographicsHousehold income (46% at least $50,000/yearInternet access option (63% primarily form home & 58% primarily from work or school)Length and frequency of use (88% access daily & 33% access 10-20 hours a week)Access cost (67% pay for their own Internet access & 31% paid for by their employers) Prentice Hall, 20009

Roles that people play in the decision making processInitiator : the person who first suggests or thinks of the idea of buying a particular product or serviceInfluencer : a person whose advice or views carry some weight in making a final buying decisionDecider : the person who ultimately makes a buying decision or any part of it - whether to buy, what to buy, how to buy, or where to buyBuyer : the person who makes an actual purchaseUser : the person who consumes or uses a product or service

The Purchasing Decision-Making ModelNeed identification(Recognition)

Relationship marketing Overt attempt of exchange partners to build a long term association, characterized by purposeful cooperation and mutual dependence on the development of social, as well as structural, bondsTreat different customers differentlyAble to change the manner its products are configured or its service is delivered, based on the individual needs of individual customers

Customer loyaltyPurchase behaviorOne of the most significant contributors to profitabilityIncrease profits; strengthen market position; become less sensitive to price competition; increase cross-selling success; save cost, etc.Real world examples1-800-FLOWERS Amazon.comFederal Express (FedEx)

Building and maintaining customer loyaltyMaintain continuous interactions between consumers and businessMake a commitment to provide all aspects of the business onlineBuild different sites for different levels of customersWilling to invest capital, both human and financial, in the information systems, to insure continuous improvement in the supporting technology as it becomes available

Customer ServiceISFLAVIA:

Information can be directed to the customer efficientlyCreation of a database which records purchases, problems and requests is facilitatedInformation can now be traced and analyzed for immediate responseIf customer service options and solutions do not maintain the same level of excitement and interaction as the advertising and sales presentations, the level of intensity declines and the vendor runs the risk of losing customers

Product Life CyclePhase 1. Requirements : assisting the customer to determine needsPhase 2. Acquisition : helping the customer to acquire a product or servicePhase 3. Ownership : supporting the customer on an ongoing basisPhase 4. Retirement : helping the client to dispose of a service or product Prentice Hall, 200020

Types of Customer Service FunctionsAnswering customer inquiresProviding technical and other informationLetting customers track accounts or order statusAllowing customers to customize and order online Prentice Hall, 200021

Addressing Individual Customer NeedsDoingbusinessvia WebCompaniesunderstand theircustomers needsand buying habitsbetterCompaniescustomize theirfuture marketingefforts Prentice Hall, 200022

Personalized Web Pagesused to record purchases and preferencedirect customized information to customers efficientlyChat Roomdiscuss issues with company experts; with other customers E-mailused to disseminate information, send product information and conduct correspondence regarding any topic, but mostly inquiries from customersFAQsnot customized, no personalized feeling and contribution to relationship marketing

AimsProblem definition andResearch objectivesFinding relationship between consumers, products, marketing methods, and marketers through information in order to discover marketing opportunities and issues, to establish marketing plans, to better understand the purchasing process, and to evaluate marketing performance

Market SegmentationMarket segmentation is the process of dividing a consumer market into meaningful groups for decision-making.In the past, most marketing approaches have focused on group-based targeted markets, not on a personal way to identify individual consumers who actually purchased and used the products.

Market SegmentationImproved methods of marketing research based on information technologies allow marketers to collect, store, and analyze detailed and personal information in a cost-efficient way.Example : Wal-MartLifestyles are typically established by consumers filling out questionnaires about their activities such as work and family, interests and opinions, etc.

Online Market ResearchUsing online technology to conduct surveysMore efficient, faster, and cheaper data collection, and a more geographically diverse audience than those found in off-line surveysAbility to incorporate radio buttons, data-entry fields and check boxes in the surveysNot suitable for every customer or product it is skewed toward highly educated males with high disposal income

Online Market ResearchRisk of losing people who sign off if they had difficulty in logging on or communicating with researchersCompanies such as E-valuations can conduct the research for your companyVALS 2 (values and lifestyles) is a well-known segmentation dividing consumers in the U.S.

Online Market Research MethodsProcess of conducting the researchDefine the research issue and the target marketIdentify newsgroups and Internet communities to studyIdentify specific topics for discussionSearch discussion group topics and content lists to find the target marketSearch e-mail discussion groups listsSubscribe to filtering services that monitor groupsRead FAQs and instructions of your competitorEnter chat rooms, whenever possible

Online Market Research MethodContent of the research instrumentPost strategic queries to news groupsOffer rewards for participationPost strategic queries on your Web sitePost relevant content to groups with a pointer to your Web site surveyPost a detailed survey in special e-mail questionnairesCreate a chat room and try to build a community of consumers

Online Market Research MethodsTarget Audience of the StudyCompare your audience to the target populationDetermine your editorial focusDetermine what Web services to create for each type of audience

Consumer Market ResearchMethods of conducting a survey: personal interviews; telephone survey and mail survey

The Internet is providing an efficient channel for faster, cheaper and more reliable collection and transmission of marketing information even in multimedia form

Intelligent AgentsComputer programs that help the users to conduct routine tasks, to search and retrieve information, to support decision making and to act as domain experts

Intelligent Agents for Information Search and Filtering

Help to determine what to buy to satisfy a specific need by looking for specific products information and critically evaluate them

Rated of products

Negotiation AgentsPrice and other terms of transactions are determined

multiple agents; classified as system where users create agents for the purpose of selling or buying goods3 strategies : anxious, cool-headed and frugalconsidering a number of different parameters: price, warranty, delivery time, service contracts, return policy, loan option and other value added services

Learning AgentsBe capable of learning individuals preferences and make suggestionsuse learning theory by monitoring customers interactionslearns customers interests, preferences and behavior and delivers to them customized service accordingly

Consumer TypesIndividual customers Vs. Organizational buyers

Behavioral ModelDecision Making Process (Group or Individual) Prentice Hall, 2000

Thank You

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